In order for a labor supply curve to be backward bending at high ...

[kaid0807]

In order for a labor supply curve to be backward bending at high wages
 
  A) workers must have an irrational response to wage increases.
  B) leisure must be an inferior good.
  C) the substitution effect of a wage increase must be greater than the income effect.
  D) the income effect of a wage increase must be greater than the substitution effect.

Question 2

Refer to Figure 24-1. Ceteris paribus, an increase in personal income taxes would be represented by a movement from
 
  A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.

[Pariscourtney]

Answer to Question 1

D

Answer to Question 2

B